Klipspringer trips over exchange rate klip

The rising South African rand has forced SouthernEra Resources (SUF-T) to suspend operations at its Klipspringer diamond project in the Limpopo province of South Africa.

SouthernEra, which holds 50% of the Klipspringer joint venture, said the operation had become unprofitable largely as the result of the rising exchange rate of the rand against the U.S. dollar. The rand has risen 28% in U.S. dollar terms since the beginning of 2003.

Klipspringer produced 16,082 carats of diamonds in the third quarter of 2003, a figure depressed by a labour strike at the mine that lasted into July. In the first quarter of 2003 — the last one unaffected by the work stoppage — it produced 29,400 carats.

The operation had been struggling in recent years following the depletion of the Marsfontein M1 pipe, trying to maintain a 30,000-tonne-per-month throughput from smaller kimberlite fissure zones. Development of mineralized zones by a decline had been successful, but the plant, which could handle 70,000 tonnes per month, was underused.

De Beers Consolidated Mines, the diamond unit of Anglo American (AAUK-Q), and an affiliated black-empowerment company, Naka Diamond Mining, own the remaining interest in the Klipspringer joint venture.


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